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F80/100FDD 2022

BodyBrite — Litigation & Risk

Personal Services - Beauty & Salon · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
80 / 100
FranchiseVerdict composite
Rating
AVOID
STRONG / MODERATE / CAUTION / AVOID

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans
6
Government-backed loans issued
Default rate
66.7%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
4 loans
Loans charged off or defaulted
Total loan volume
$626K
Avg loan size
$104K
Participating lenders
6

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Minnesota
State whose law governs disputes — relevant if you're not based there

What drove the 80/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 15.4% YoY (14 units) indicating system contraction and potential viability concerns
  2. 02MEDNo Item 19 (average revenue/net income) disclosed — inability to assess unit profitability or ROI
  3. 03HIGHActive litigation history with settlement requiring franchisor equipment payout suggests operational/contractual disputes
  4. 04MINORHigh investment ceiling ($383,770) paired with declining unit count raises capital recovery risk
  5. 05MINORDual fee structure (4-6% royalty vs. $1,500 flat) lacks transparency on which model most franchisees adopt and actual cost burden

Severity inferred from FDD text — not a regulatory or legal classification

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.